Ethanol is making a point that Big Oil is receiving subsidies and ethanol isn't

Ethanol is holding one huge, sarcastic birthday party for Big Oil in celebration of its oldest subsidy enacted 100 years ago.

The 100th birthday for oil's oldest subsidy -- which began in 1913 -- will be prepared by the Iowa Renewable Fuels Association (IRFA), which promotes Iowa ethanol and biodiesel growth, and the American Coalition for Ethanol (ACE), which encourages the production and use of ethanol.

“And it dawned on us a few months ago that this is in fact the 100th birthday for oil subsidies and this calls for a party, and I think people can assume our tongues are firmly planted in our cheeks when we say we’re going to celebrate that fact,” said Monte Shaw, executive director of IRFA.

Why is the ethanol industry doing this? According to Shaw, the ethanol blenders tax credit expired in 2011, and ethanol has been forced to continue on without any help. However, Big Oil, which is already the most profitable industry in the world, still receives subsidies. The oldest, continuous subsidy was enacted in 1913, which is the topic of the birthday party.

“What we’re saying is, they’re there," said Shaw. "And we’re sick and tired of members of Congress who don’t know any better or don’t want to know any better, saying, oh, why do you need the RFS? Why do you this, why do you need that? Can’t you just compete on a level playing field? When the fact of the matter is, our competition has had 100 years of subsidization. They’ve had nearly 40 years of a petroleum mandate written into federal law that says unless you drive a flex-fuel vehicle, you will purchase gasoline with a minimum amount of petroleum (85% percent of petroleum). The playing field is overwhelmingly tilted to the oil industry and that has got to be a part of all discussions around the RFS."

The RFS is the Renewable Fuel Standard, which is a U.S. federal program that requires transportation fuel to have a certain amount of renewable fuels when sold in the U.S.

The birthday party, called "Century of Subsidies," will be held on Thursday, March 14, 2013 from 2:30 p.m. to 3:30 p.m. at 430 Dirksen Senate Office Building in Washington DC.

The problem is at least twofold. First the RFS tries to mandate an impossible goal. Nobody but the corn ethanol industry disputes this. The amount of ethanol mandated means nothing more than giving $$s to produce ethanol by corn. That's now recognized as a loser of an idea. If Exxon-Mobil doesn't need it's subsidies, then neither does ADM.

Second, while the idea to push the technology might (arguably) be a good one, the state of the industry is where low flush toilets were when they were first mandated - not ready for prime time. Mandating a certain % of fuel be ethanol is not the way to push the state of the industry. If the Govt wants to play that role, it should fund more basic research into methods that might, someday down the road, have the potential be be fuel sources w/o reducing food production. That should be the method, not mandating some amount of gallons be produced.